Income Tax

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

10. INCOME TAXES

The components of income (loss) before income taxes are as follows (in thousands):

	For the Years Ended December 31,
	2022			2021		2020
United States	$	(4,099	)	$	10,028	$	(45,167	)
Other countries		34,053			26,082		(46,010	)
Income (loss) before income taxes	$	29,954		$	36,110	$	(91,177	)

The components of income tax expense (benefit) are as follows (in thousands):

	For the Years Ended December 31,
	2022			2021		2020
Current:
United States	$	1,269		$	1,983	$	5,181
Other countries		9,784			6,500		11,926
State and provincial		(100	)		699		618
Total current		10,953			9,182		17,725
Deferred:
United States		(908	)		905		(69	)
Other countries		(162	)		5,630		(11,144	)
State and provincial		413			174		(616	)
Total deferred		(657	)		6,709		(11,829	)
Income tax expense (benefit)	$	10,296		$	15,891	$	5,896

The differences in income tax expense (benefit) computed using the Netherlands statutory income tax rate of 25% and our income tax expense (benefit) as reported in the accompanying consolidated statements of operations are as follows (in thousands):

	For the Years Ended December 31,
	2022			2021			2020
Tax at the Netherlands income tax rate	$	7,368		$	8,981		$	(23,005	)
International earnings taxed at rates other than the    Netherlands statutory rate		5,923			9,403			14,986
Non-deductible expenses		3,096			1,875			2,977
Change in valuation allowance		1,943			1,113			23
State and provincial taxes		662			462			(227	)
Tax credits		(6,872	)		(7,992	)		(5,975	)
Unremitted earnings of subsidiaries		(27	)		1,236			418
Adjustments of prior year taxes		(3,488	)		1,320			545
Adjustments of income tax reserves		(184	)		(1,345	)		(1,965	)
Non-deductible goodwill impairment		—			—			15,547
Foreign exchange		(576	)		(1,168	)		226
UK tax rate change		676			(905	)		—
Netherlands audit settlement		—			1,522			—
Accrued withholding taxes		1,883			1,648			2,092
Other		(108	)		(259	)		254
Income tax expense (benefit)	$	10,296		$	15,891		$	5,896

Deferred tax assets and liabilities result from various temporary differences between the financial statement carrying amount and their tax basis. Deferred tax assets and liabilities are summarized as follows (in thousands):

	December 31,
	2022			2021
Deferred tax assets:
Net operating loss carry-forwards	$	13,097		$	10,622
Tax credit carry-forwards		4,653			4,658
Accruals for compensation		7,517			7,440
Accruals for inventory capitalization		992			3,192
Unrealized benefit from corporate restructuring		44,888			49,313
Intangibles		1,026			582
Unrealized benefit plan loss		2,070			1,974
Unrealized foreign exchange		2,881			2,853
UK tax rate change		318			905
Unearned revenue		882			1,024
Interest carry-forward		7,700			2,677
Other		322			1,183
Total deferred tax assets		86,346			86,423
Valuation allowance		(9,318	)		(7,377	)
Net deferred tax assets		77,028			79,046
Deferred tax liabilities:
Property, plant and equipment		(3,246	)		(4,139	)
Accrued withholding taxes		(26,489	)		(27,544	)
Unrealized foreign exchange		(1,415	)		(1,070	)
Other		(185	)		(167	)
Total deferred tax liabilities		(31,335	)		(32,920	)
Net deferred income taxes	$	45,693		$	46,126

The table below summarizes the net deferred tax assets and net deferred tax liabilities by legal jurisdiction (in thousands):

	December 31,
	2022			2021
Long-term deferred tax assets, net	$	68,570		$	70,462
Long-term deferred tax liabilities, net		(22,877	)		(24,336	)
Net deferred income taxes	$	45,693		$	46,126

At December 31, 2022, we had tax net operating loss carry-forwards in various tax jurisdictions of $55.6 million. Although we cannot be certain that these operating loss carry-forwards will be utilized, we anticipate that we will have sufficient taxable income in future years to allow us to fully utilize the carry-forwards that are not subject to a valuation allowance. As of December 31, 2022, if unused, $0.8 million will expire between 2023 and 2024, $3.0 million will expire between 2025 and 2027, $9.8 million will expire between 2028 and 2031 and $7.7 million will expire beyond 2031. The remaining balance of $34.3 million is not subject to expiration. During 2022, no material net operating loss carry-forwards, which carried a full valuation allowance, expired unused.

We file income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. We are currently undergoing multiple examinations in various jurisdictions, and the years 2011 through 2021 remain open for examination in various tax jurisdictions in which we operate. The ultimate settlement and timing of these additional tax assessments is uncertain but the Company will continue to vigorously defend its return filing position and does not view the assessments as probable at this time.

During 2022, adjustments were made to estimates for uncertain tax positions in certain tax jurisdictions based upon changes in facts and circumstances, resulting in a reduction to the unrecognized tax benefits. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

	For the Years Ended December 31,
	2022			2021			2020
Unrecognized tax benefits at January 1,	$	4,327		$	6,255		$	7,301
Tax positions, current period		230			204			1,650
Tax positions, prior period		(867	)		(197	)		(491	)
Settlements with taxing authorities		(19	)		(1,395	)		(2,159	)
Lapse of applicable statute of limitations		(162	)		(540	)		(46	)
Unrecognized tax benefits at December 31,	$	3,509		$	4,327		$	6,255

Our policy is to record accrued interest and penalties on uncertain tax positions, net of any tax effect, as part of total tax expense for the period. The corresponding liability is carried along with the tax exposure as a non-current payable in other long-term liabilities. For the years ended December 31, 2022, 2021 and 2020, we recognized $(0.2) million, $0.3 million and $(0.9) million, respectively, in interest and penalties. As of December 31, 2022 and 2021, we had $4.3 million and $4.5 million, respectively, accrued for the payment of interest and penalties. Changes in our estimate of unrecognized tax benefits would affect our effective tax rate. As of December 31, 2022, there are $0.2 million of unrecognized tax benefits that could be resolved within the next twelve months which could have a positive effect on the annual effective tax rate.